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TitleChapter 6 mas short term budgeting
TagsInventory Income Statement Expense Revenue Accrual
File Size119.2 KB
Total Pages18
Table of Contents
                            July
August
September
Total
Q1
Q2
Variable overhead
Dividends 40,000 287,500
	Month of sales
	Variable Costs
	Fixed Cost
                        
Document Text Contents
Page 1

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CHAPTER 6
BUDGETING

[Problem 1]
Zamboanga Company
Production Budget
For the Third Quarter, July-September, 200X

July August September Total

Budgeted sales 30,000 45,000 60,000 135,000

Add: Finished goods – end.

(40% x next month's sales) 18,000 24,000 20,000 20,000

Total goods available for sale 48,000 69,000 80,000 155,000

Less: Finished goods – beg. 10,000 18,000 24,000 10,000

Budgeted production 38,000 51,000 56,000 145,000

[Problem 2]
Aparri Company
Budgeted Materials Purchases
For The Year Ended, December 31, 2005

Q1 Q2 Q3 Q4 Total

Budgeted production (units) 80,000 120,000 200,000 180,000 580,000

x Standard materials/unit 3 3 3 3 3

Materials used 240,000 360,000 600,000 240,000 1,740,000

Add: Materials inventory - end

(20% x next quarter's sales) 72,000 120,000 108,000 54,000(1) 54,000

Total materials 312,000 480,000 708,000 594,000 1,794,000

Less: Materials inventory-beg. 42,000 72,000 120,000 108,000 42,000

Materials purchase (units) 270,000 408,000 588,000 486,000 1,752,000

x Standard materials cost per unit P 200 P 200 P 200 P 200 P 200
Budgeted materials purchases
(pesos) P 54,000,000 P 81,600,000 P117,600,000 P97,200,000 P350,400,000
(1) 90000 x 3 x 20% = 54,000

[Problem 3]

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a. Cagayan Corporation
Budgeted Production
For The Second Quarter, April-June 20__

April May June Total

Budgeted sales (units) 90,000 98,000 45,000 233,000

Add: Finished goods inventory - ending (1) 25,600 15,000 12,000 12,000

Total goods available for sale 115,600 113,000 57,000 245,000

Less: Finished goods inventory - beginning 14,000 25,600 15,000 14,000

Budgeted Production 101,600 87,400 42,000 231,000

(1) FG, end = 6000 + 20% (next month’s sales)
FG- 6/30 = 6,000 + 20% (30,000) = 12,000 units

b. Cagayan Corporation
Budgeted Raw Materials Purchases
For The Second Quarter, April-June, 20__

April May June Total

Budgeted Production (units) 101,600 87,400 42,000 231,000

x Standard saterials / unit 4 lbs. 4 lbs. 4 lbs. 4 lbs.

Materials used (lbs.) 406,400 349,600 168,000 924,000
Add: Materials inventory – ending

(1/4 x next month’s sales) 87,400 42,000 30000(1) 30,000

Total materials 493,800 391,600 198,000 954,000

Less: Materials inventory - beginning 60,000 87,400 42,000 60,000

Budgeted materials purchase (in lbs.) 433,800 304,200 156,000 894,000


(1) Materials inventory - 6/30 = 30,000 x 4 lbs. x 1/4 = 30,000 lbs.

[Problem 4].
a. JVC Company

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Page 10

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Page 17

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For The Month of March 20xx

Actual Flexible Variance

Variable Costs Costs Budget UF (F)

Gasoline P 5,323.00 P 5,512.50 P (189.50)F

Oil, minor repairs, parts and supplies 380.00 378.00 2.00UF

Outside repairs 50.00 225.00 (175.00)F

Sub-total 5,753.00 6,115.50 (362.50)F

Fixed Cost

Insurance 525.00 500.00 25.00UF

Salaries and benefits 2,500.00 2,500.00 0.00

Depreciation 2,310.00 2,200.00 110.00UF

Sub-total 5,335.00 5,200.00 135.00UF

Totals P 11,088.00 P 11,315.50 P (227.50)F

Cost per mile (Costs + 63,000 miles) P 0.1760 P 0.1796 P (0.0036)F

(1) Gasoline = 63,000 x P1.40/16 = P 5,512.50
Oil, etc., = 63,000 x P 0.006 = P 378

[Problem 23]
a. Triple-F Health Club
Cash Budget
For The Year Ended October 31, 20C
(in thousands)

Receipts:
Annual membership fees (P 355 x 110% x 103%) P 402.2
Lesson and class fee (P 234 x 234/180) 304.2
Miscellaneous (P 2 x 2/1.5) 2.7 P 708.9
Payments:
Manager’s salary and benefits (P 36 x 115%) 41.4
Regular employees wages and benefits (P 190 x 115%) 218.5
Lesson and class employee wages and benefits
(P 195 x 234/180 x 115%) 291.5
Travel and supplies (P 16 x 125%) 20.0
Utilities (P 22 x 125%) 27.5
Mortgage interest (P360 x 9%) 32.4
Miscellaneous (P2 x 125%) 2.5
Equipment payable 10.0
Accounts payable for supplies and utilities 2.5
Amortization of mortgage payable 30.0
Purchase of new equipment 25.0 701.3
Net cash inflows 7.6
Add: Cash balance - Oct. 31,20B 7.3
Cash balance - Oct. 31, 20C P 14.9

b. Problem(s) discloses by the prepared budget:
1. Incremental revenues are basically determined by the membership base, which

may be considered relatively non-controllable.

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